Disqualification of Directors is a legal restriction that prevents certain individuals from acting as company directors due to misconduct, criminal convictions, or failure to meet statutory duties.
Disqualification of directors typically occurs due to criminal convictions involving fraud or dishonesty, persistent breaches of company law, or trading whilst knowing the company was insolvent.
The courts can also impose disqualification following investigations into company failures where directors showed unfitness.
Disqualification of directors usually ranges from two to fifteen years, depending on the severity of the misconduct.
Most disqualifications last between five and ten years, though serious cases involving fraud can result in longer periods.
Disqualified directors cannot legally act as directors, but they may work as employees or consultants with proper court permission.
However, they cannot influence board decisions or effectively control company operations without risking criminal prosecution.
Ignoring disqualification of directors is a criminal offence that can result in imprisonment for up to two years and unlimited fines.
The individual becomes personally liable for company debts incurred during the period of illegal directorship.
You can verify disqualification of directors through the relevant company registry's online database, which maintains public records of all disqualified individuals.
Most registries provide free search facilities where you can check names and disqualification periods.
Disqualification of directors can be challenged in court within six weeks of the order, though successful appeals are rare.
Early termination requires a formal court application demonstrating rehabilitation and is typically only granted in exceptional circumstances after serving a significant portion of the disqualification period.
